Chris Jochnick and Fraser A. Preston
- Published in print:
- 2006
- Published Online:
- May 2006
- ISBN:
- 9780195168006
- eISBN:
- 9780199783458
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0195168003.003.0001
- Subject:
- Economics and Finance, Development, Growth, and Environmental
This introductory chapter begins with a brief discussion of the real cost of sovereign debt. It then describes the three parts of the book. An overview of the chapters included in this volume is ...
More
This introductory chapter begins with a brief discussion of the real cost of sovereign debt. It then describes the three parts of the book. An overview of the chapters included in this volume is presented.Less
This introductory chapter begins with a brief discussion of the real cost of sovereign debt. It then describes the three parts of the book. An overview of the chapters included in this volume is presented.
GERANIO MANUELA and HALLAK ISSAM
- Published in print:
- 2012
- Published Online:
- May 2013
- ISBN:
- 9780199754656
- eISBN:
- 9780199979462
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199754656.003.0010
- Subject:
- Economics and Finance, Financial Economics, International
International debt markets have gone through major changes during the past 20 years. Reduction in capital controls and privatization of the manufacturing and banking sectors created a higher demand ...
More
International debt markets have gone through major changes during the past 20 years. Reduction in capital controls and privatization of the manufacturing and banking sectors created a higher demand for international debt, which is debt denominated in nondomestic currencies, from the private sector. This major change had important consequences. While international debt crises used to be attributed to state mismanagement of borrowed funds, such crises are now largely due to poor performance in the private sector. Yet, corporate debts have several advantages compared with sovereign debts. The chapter begins by discussing new developments and describing the impact on country risk and cost of capital. Next, the chapter explains how these developments affect the international financial architecture by describing the differences between corporate and sovereign debt. International bond issuance and the latest developments are then discussed to explain the impact of these main changes.Less
International debt markets have gone through major changes during the past 20 years. Reduction in capital controls and privatization of the manufacturing and banking sectors created a higher demand for international debt, which is debt denominated in nondomestic currencies, from the private sector. This major change had important consequences. While international debt crises used to be attributed to state mismanagement of borrowed funds, such crises are now largely due to poor performance in the private sector. Yet, corporate debts have several advantages compared with sovereign debts. The chapter begins by discussing new developments and describing the impact on country risk and cost of capital. Next, the chapter explains how these developments affect the international financial architecture by describing the differences between corporate and sovereign debt. International bond issuance and the latest developments are then discussed to explain the impact of these main changes.
Tariq Banuri and Juliet B. Schor (eds)
- Published in print:
- 1992
- Published Online:
- October 2011
- ISBN:
- 9780198283645
- eISBN:
- 9780191684463
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198283645.003.0008
- Subject:
- Economics and Finance, Development, Growth, and Environmental
The international debt crisis in 1980 initiated the use of various theoretical and conceptual aspects of the fall of international lending in terms of issues of liquidity, solvency, and enforcement ...
More
The international debt crisis in 1980 initiated the use of various theoretical and conceptual aspects of the fall of international lending in terms of issues of liquidity, solvency, and enforcement in sovereign debt. In addition, the debt crisis brought about several consequences in terms of the reinforced conditionality on domestic policy, the reverse transfer of resources, and national-level social and economic performance. Solvency issues have significant impacts on fiscal policy from the optimal debt accumulation framework. This chapter attempts to assert how the undesirable consequences attributed to over-indebtedness affect repayment difficulties as well as the effectiveness of various macroeconomic policies. The breakdown of lending from both domestic and foreign lenders through modifying the capital inflows and outflows patterns brings about adverse effects in trade-offs.Less
The international debt crisis in 1980 initiated the use of various theoretical and conceptual aspects of the fall of international lending in terms of issues of liquidity, solvency, and enforcement in sovereign debt. In addition, the debt crisis brought about several consequences in terms of the reinforced conditionality on domestic policy, the reverse transfer of resources, and national-level social and economic performance. Solvency issues have significant impacts on fiscal policy from the optimal debt accumulation framework. This chapter attempts to assert how the undesirable consequences attributed to over-indebtedness affect repayment difficulties as well as the effectiveness of various macroeconomic policies. The breakdown of lending from both domestic and foreign lenders through modifying the capital inflows and outflows patterns brings about adverse effects in trade-offs.
Jerome Roos
- Published in print:
- 2019
- Published Online:
- May 2019
- ISBN:
- 9780691180106
- eISBN:
- 9780691184937
- Item type:
- book
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691180106.001.0001
- Subject:
- Business and Management, Public Management
The European debt crisis has rekindled long-standing debates about the power of finance and the fraught relationship between capitalism and democracy in a globalized world. This book unravels a ...
More
The European debt crisis has rekindled long-standing debates about the power of finance and the fraught relationship between capitalism and democracy in a globalized world. This book unravels a striking puzzle at the heart of these debates—why, despite frequent crises and the immense costs of repayment, do so many heavily indebted countries continue to service their international debts? The book provides a sweeping investigation of the political economy of sovereign debt and international crisis management. It takes readers from the rise of public borrowing in the Italian city-states to the gunboat diplomacy of the imperialist era and the wave of sovereign defaults during the Great Depression. The book vividly describes the debt crises of developing countries in the 1980s and 1990s, and sheds new light on the recent turmoil inside the Eurozone—including the dramatic capitulation of Greece's short-lived anti-austerity government to its European creditors in 2015. Drawing on in-depth case studies of contemporary debt crises in Mexico, Argentina, and Greece, the book paints a disconcerting picture of the ascendancy of global finance. It shows how the profound transformation of the capitalist world economy over the past four decades has endowed private and official creditors with unprecedented structural power over heavily indebted borrowers, enabling them to impose painful austerity measures and enforce uninterrupted debt service during times of crisis—with devastating social consequences and far-reaching implications for democracy.Less
The European debt crisis has rekindled long-standing debates about the power of finance and the fraught relationship between capitalism and democracy in a globalized world. This book unravels a striking puzzle at the heart of these debates—why, despite frequent crises and the immense costs of repayment, do so many heavily indebted countries continue to service their international debts? The book provides a sweeping investigation of the political economy of sovereign debt and international crisis management. It takes readers from the rise of public borrowing in the Italian city-states to the gunboat diplomacy of the imperialist era and the wave of sovereign defaults during the Great Depression. The book vividly describes the debt crises of developing countries in the 1980s and 1990s, and sheds new light on the recent turmoil inside the Eurozone—including the dramatic capitulation of Greece's short-lived anti-austerity government to its European creditors in 2015. Drawing on in-depth case studies of contemporary debt crises in Mexico, Argentina, and Greece, the book paints a disconcerting picture of the ascendancy of global finance. It shows how the profound transformation of the capitalist world economy over the past four decades has endowed private and official creditors with unprecedented structural power over heavily indebted borrowers, enabling them to impose painful austerity measures and enforce uninterrupted debt service during times of crisis—with devastating social consequences and far-reaching implications for democracy.
Youssef Cassis
- Published in print:
- 2011
- Published Online:
- May 2011
- ISBN:
- 9780199600861
- eISBN:
- 9780191724930
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199600861.003.0003
- Subject:
- Business and Management, Finance, Accounting, and Banking, Business History
This chapter discusses the four major financial crises that broke out in the core industrial countries between the end of Bretton Woods in 1971 and the early 21st century: the Financial Instability ...
More
This chapter discusses the four major financial crises that broke out in the core industrial countries between the end of Bretton Woods in 1971 and the early 21st century: the Financial Instability of the early 1970s and the ensuing bank failures, especially in Britain, Germany, and the United States, within the context of ‘stagflation’ and the end of fixed exchange rates; the International Debt Crisis of 1982, when the international financial system was threatened with collapse; the Japanese Banking Crisis of 1997–8, which undermined the financial system of the world's second largest economic power; and the Financial Debacle of 2007–8.Less
This chapter discusses the four major financial crises that broke out in the core industrial countries between the end of Bretton Woods in 1971 and the early 21st century: the Financial Instability of the early 1970s and the ensuing bank failures, especially in Britain, Germany, and the United States, within the context of ‘stagflation’ and the end of fixed exchange rates; the International Debt Crisis of 1982, when the international financial system was threatened with collapse; the Japanese Banking Crisis of 1997–8, which undermined the financial system of the world's second largest economic power; and the Financial Debacle of 2007–8.
Armin von Bogdandy and Matthias Goldmann
- Published in print:
- 2013
- Published Online:
- January 2014
- ISBN:
- 9780199674374
- eISBN:
- 9780191752315
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199674374.003.0003
- Subject:
- Law, Company and Commercial Law, Public International Law
This paper argues that many sovereign debt restructurings as agreed between defaulting states and their multilateral, bilateral, or private creditors constitute exercises of international public ...
More
This paper argues that many sovereign debt restructurings as agreed between defaulting states and their multilateral, bilateral, or private creditors constitute exercises of international public authority. Their authoritative character results from their effects on the citizens of the defaulting state, especially through adjustment programs. They also affect taxpayers in lending states as well as private creditors. Their public and international character derives from their legal basis in hard or soft public international law. As a consequence of their qualification as exercises of international public authority, sovereign debt restructurings need to be framed by public law in order to ensure their legitimacy. This paper shows how legal scholarship might promote the development of such a public law framework. The paper then proposes a set of legal principles for sovereign debt restructurings. Some of them might already exist de lege lata, while others should be understood as proposals de lege ferenda. Legal scholarship is especially useful for developing procedural requirements, while substantive issues require a political decision, with the exception of the need to respect fundamental human rights. Most importantly, however, the qualification of sovereign debt restructurings as exercises of public authority requires domestic and international courts and tribunals to defer to them and to stay enforcement as long as such restructurings are being negotiated or implemented. A general principle of law to that effect seems to be emerging. In deciding about a stay, domestic and international courts and tribunals might control the legitimacy of sovereign debt restructurings.Less
This paper argues that many sovereign debt restructurings as agreed between defaulting states and their multilateral, bilateral, or private creditors constitute exercises of international public authority. Their authoritative character results from their effects on the citizens of the defaulting state, especially through adjustment programs. They also affect taxpayers in lending states as well as private creditors. Their public and international character derives from their legal basis in hard or soft public international law. As a consequence of their qualification as exercises of international public authority, sovereign debt restructurings need to be framed by public law in order to ensure their legitimacy. This paper shows how legal scholarship might promote the development of such a public law framework. The paper then proposes a set of legal principles for sovereign debt restructurings. Some of them might already exist de lege lata, while others should be understood as proposals de lege ferenda. Legal scholarship is especially useful for developing procedural requirements, while substantive issues require a political decision, with the exception of the need to respect fundamental human rights. Most importantly, however, the qualification of sovereign debt restructurings as exercises of public authority requires domestic and international courts and tribunals to defer to them and to stay enforcement as long as such restructurings are being negotiated or implemented. A general principle of law to that effect seems to be emerging. In deciding about a stay, domestic and international courts and tribunals might control the legitimacy of sovereign debt restructurings.
Juan Carlos Moreno-Brid and Jaime Ros
- Published in print:
- 2009
- Published Online:
- May 2009
- ISBN:
- 9780195371161
- eISBN:
- 9780199870608
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195371161.003.0007
- Subject:
- Economics and Finance, Economic History
Chapter 7 looks at Mexico's radical economic policy responses and adjustment to the adverse shocks of the debt crisis of 1982 and the oil price collapse of 1986, which implied an about face in the ...
More
Chapter 7 looks at Mexico's radical economic policy responses and adjustment to the adverse shocks of the debt crisis of 1982 and the oil price collapse of 1986, which implied an about face in the nation's traditional development agenda from the mid-1980s onward. It shows how the adjustment problems conditioned the results of the various stabilization programs attempted, from a failed initial orthodox strategy attempted to an “heterodox shock” in late 1987. It describes in detail the macroeconomic reform process launched in this decade, including trade liberalization (which ultimately led to NAFTA), the deregulation of foreign direct investment and financial markets, the privatization of public enterprises, and the watering down of industrial policies. The chapter includes sections on competition policy and the deregulation of tertiary activities, as well as on the reforms to the land tenure system and agricultural policy.Less
Chapter 7 looks at Mexico's radical economic policy responses and adjustment to the adverse shocks of the debt crisis of 1982 and the oil price collapse of 1986, which implied an about face in the nation's traditional development agenda from the mid-1980s onward. It shows how the adjustment problems conditioned the results of the various stabilization programs attempted, from a failed initial orthodox strategy attempted to an “heterodox shock” in late 1987. It describes in detail the macroeconomic reform process launched in this decade, including trade liberalization (which ultimately led to NAFTA), the deregulation of foreign direct investment and financial markets, the privatization of public enterprises, and the watering down of industrial policies. The chapter includes sections on competition policy and the deregulation of tertiary activities, as well as on the reforms to the land tenure system and agricultural policy.
Kevin Cowan and José De Gregorio
- Published in print:
- 2007
- Published Online:
- February 2013
- ISBN:
- 9780226184975
- eISBN:
- 9780226184999
- Item type:
- chapter
- Publisher:
- University of Chicago Press
- DOI:
- 10.7208/chicago/9780226184999.003.0007
- Subject:
- Economics and Finance, Macro- and Monetary Economics
This chapter describes Chile's experience with capital account restrictions and exchange rate policy. Chile did not suffer a sudden stop but a current account reversal due to policy reactions and a ...
More
This chapter describes Chile's experience with capital account restrictions and exchange rate policy. Chile did not suffer a sudden stop but a current account reversal due to policy reactions and a “sudden start” in capital outflows. The banks in Chile during the 1990s mediate a relatively low share of international debt inflows. In the years after the capital account was fully liberalized and the exchange rate floated, banks have begun playing a significantly larger role in debt inflows. Those countries with fixed and managed exchange rates are more prone to increases in external debt, and capital controls do not play a significant role in decreasing debt inflows. The Chilean experience was the result of a reversal in the current account, induced primarily by a very tight monetary policy and domestic liquidity squeeze, a sharp decline in terms of trade, and a strong defense of the peso.Less
This chapter describes Chile's experience with capital account restrictions and exchange rate policy. Chile did not suffer a sudden stop but a current account reversal due to policy reactions and a “sudden start” in capital outflows. The banks in Chile during the 1990s mediate a relatively low share of international debt inflows. In the years after the capital account was fully liberalized and the exchange rate floated, banks have begun playing a significantly larger role in debt inflows. Those countries with fixed and managed exchange rates are more prone to increases in external debt, and capital controls do not play a significant role in decreasing debt inflows. The Chilean experience was the result of a reversal in the current account, induced primarily by a very tight monetary policy and domestic liquidity squeeze, a sharp decline in terms of trade, and a strong defense of the peso.
Deborah Brautigam
- Published in print:
- 2019
- Published Online:
- June 2019
- ISBN:
- 9780198830504
- eISBN:
- 9780191868696
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780198830504.003.0007
- Subject:
- Economics and Finance, International, Development, Growth, and Environmental
This chapter explores Chinese loan finance in Africa and its relevance for Africa’s economic modernization and structural transformation between 1960 and 2016. Drawing on an original database of ...
More
This chapter explores Chinese loan finance in Africa and its relevance for Africa’s economic modernization and structural transformation between 1960 and 2016. Drawing on an original database of Chinese loan finance China–Africa Research Initiative at Johns Hopkins University’s School of Advanced International Studies (SAIS-CARI), the chapter begins by outlining the changing actors involved in lending from China and the different kinds of loan instrument. It then examines the sectors in which Chinese lending clusters, shedding light on the degree to which African borrowers use these loans directly or indirectly to support structural transformation projects in industrialization and agro-finance, and related infrastructure. The chapter pays special attention to the modalities of structuring loan finance and providing guarantees of repayment in risky environments when many countries have only recently emerged from a long debt crisis. Finally, it considers concern over rising debt levels in a number of African countries.Less
This chapter explores Chinese loan finance in Africa and its relevance for Africa’s economic modernization and structural transformation between 1960 and 2016. Drawing on an original database of Chinese loan finance China–Africa Research Initiative at Johns Hopkins University’s School of Advanced International Studies (SAIS-CARI), the chapter begins by outlining the changing actors involved in lending from China and the different kinds of loan instrument. It then examines the sectors in which Chinese lending clusters, shedding light on the degree to which African borrowers use these loans directly or indirectly to support structural transformation projects in industrialization and agro-finance, and related infrastructure. The chapter pays special attention to the modalities of structuring loan finance and providing guarantees of repayment in risky environments when many countries have only recently emerged from a long debt crisis. Finally, it considers concern over rising debt levels in a number of African countries.
